Answered: A sum of $ 2,000 is spent today, $ 500…

A sum of $ 2,000 is spent today, $ 500 is spent at the end of each year for 6 years, $ 800 is also spent at the beginning of year 3 and 5. What is the Amount after 6 years, if the interest is 6% ?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

A sum of $ 2,000 is spent today, $ 500 is spent at the end of each year for 6 years, $ 800 is also spent at the beginning of year 3 and 5. What is the Amount after 6 years, if the interest is 6% ?

Dont use excel.

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Future Value formulae:

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Calculate FV of 2000 spent today:

VIEW

Calculate future value of 500 spent at the end of 6 years:

VIEW

Calculate FV for 800 spent at beginning of 3 and 5 years:

VIEW

Calculate total amount after 6 years:

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Answer:

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